Opinion
For Carpenters Southwest Administrative Corporation, a California non-profit corporation, Board of Trustees for the Carpenters Southwest Trusts, Plaintiffs: Jodi Siegner, Varand Vartanian, LEAD ATTORNEYS, DeCarlo and Shanley APC, Los Angeles, CA.
PROCEEDINGS: ORDER (1) GRANTING PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT (DOC. NO. 28); (2) VACATING THE AUGUST 17, 2015 HEARING (IN CHAMBERS)
JESUS G. BERNAL, UNITED STATES DISTRICT JUDGE.
The Court has received and considered all papers filed in support of the Motion for Summary Judgment (Doc. No. 28) submitted by Plaintiffs Carpenters Southwest Administrative Corporation and Board of Trustees for the Carpenters Southwest Trusts (collectively, " Plaintiffs") against Defendant Gamma Construction Services (" Defendant"). Defendant did not file an opposition to the Motion. For the reasons set forth below, the Court GRANTS the Motion. Pursuant to Local Rule 7-15, the Court finds no hearing is necessary on the matter, and the August 17, 2015 hearing is therefore VACATED.
I. BACKGROUND
Plaintiffs brought this ERISA action to collect unpaid fringe benefit contributions and related damages owed by Defendant pursuant to a collective bargaining agreement. Plaintiffs filed their Complaint against Defendant on June 16, 2014, asserting the following claims: (1) damages for failure to pay fringe benefits; (2) defalcation of fiduciary; (3) specific performance for specific missing reports; and (4) injunctive relief for failure to timely file and pay employer monthly reports. (Doc. No. 1.) On August 26, 2014, Defendant filed an answer to the Complaint. (Doc. No. 15.)
Plaintiffs voluntarily dismissed their second claim for relief on July 13, 2015. (Doc. No. 28.)
On July 16, 2015, Plaintiffs filed a Motion for Summary Judgment (" Motion, " Doc. No. 28) with supporting declarations from Varand Vartanian (" Vartanian Decl., " Doc. No. 28-2), Kristin Tingley (" Tingley Decl., " Doc. No. 28-3), and Richard Watanabe (" Watanabe Decl., " Doc. No. 28-10). Plaintiffs also filed a Statement of Uncontroverted Facts (" SUF, " Doc. No. 28-12.) Defendant did not oppose the Motion.
Unless otherwise noted, all mentions of " Rule" refer to the Federal Rules of Civil Procedure.
A motion for summary judgment shall be granted when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The moving party must show that " under the governing law, there can be but one reasonable conclusion as to the verdict." Anderson, 477 U.S. at 250.
Generally, the burden is on the moving party to demonstrate that it is entitled to summary judgment. Margolis v. Ryan, 140 F.3d 850, 852 (9th Cir. 1998); Retail Clerks Union Local 648 v. Hub Pharmacy, Inc., 707 F.2d 1030, 1033 (9th Cir. 1983). The moving party bears the initial burden of identifying the elements of the claim or defense and evidence that it believes demonstrates the absence of an issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). When the non-moving party has the burden at trial, however, the moving party need not produce evidence negating or disproving every essential element of the non-moving party's case. Celotex, 477 U.S. at 325. Instead, the moving party's burden is met by pointing out an absence of evidence supporting the non-moving party's case. Id. The burden then shifts to the non-moving party to show that there is a genuine issue of material fact that must be resolved at trial. Fed.R.Civ.P. 56(e); Celotex, 477 U.S. at 324; Anderson, 477 U.S. at 256. The nonmoving party must make an affirmative showing on all matters placed in issue by the motion as to which it has the burden of proof at trial. Celotex, 477 U.S. at 322; Anderson, 477 U.S. at 252; see also William W. Schwarzer, A. Wallace Tashima & James M. Wagstaffe, Federal Civil Procedure Before Trial, 14:144. " This burden is not a light one. The non-moving party must show more than the mere existence of a scintilla of evidence." In re Oracle Corp. Sec. Litig., 627 F.3d 376, 387 (9th Cir. 2010) (citing Anderson, 477 U.S. at 252). " The non-moving party must do more than show there is some 'metaphysical doubt' as to the material facts at issue." In re Oracle, 627 F.3d at 387 (citing Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)).
A genuine issue of material fact exists " if the evidence is such that a reasonable jury could return a verdict for the non-moving party." Anderson, 477 U.S. at 248. In ruling on a motion for summary judgment, the Court construes the evidence in the light most favorable to the non-moving party. Barlow v. Ground, 943 F.2d 1132, 1135 (9th Cir. 1991); T.W. Elec. Serv. Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630-31 (9th Cir. 1987).
III. FACTS
A. Defendant's Failure to Oppose Plaintiffs' Motion
" Any party who opposes [a motion for summary judgment] shall serve and file with the opposing papers a separate document containing a concise 'Statement of Genuine Disputes' setting forth all material facts as to which it is contended there exists a genuine dispute necessary to be litigated." L.R. 56-1. Where, as here, a party fails to file opposing papers or evidence, the Court " may assume that the material facts as claimed and adequately supported by the moving party are admitted to exist without controversy." L.R. 56-3; see also Fed.R.Civ.P. 56(e) (" If a party . . . fails to properly address another party's assertion of fact as required by Rule 56(c), the court may: . . . (2) consider the fact undisputed for the purposes of the motion; (3) grant summary judgment if the motion and supporting materials -- including the facts considered undisputed -- show that the movant is entitled to it. . . ."). Thus, without an opposition or evidence from Defendant, the Court applies standards consistent with Rule 56 and determines whether Plaintiffs' evidence demonstrates the absence of a genuine issue of material fact and whether Plaintiffs are entitled to judgment as a matter of law. See Henry v. Gill Indus., Inc., 983 F.2d 943, 949-50 (9th Cir. 1993).
B. Plaintiffs' Asserted Facts and Supporting Evidence
The following material facts are sufficiently supported by admissible evidence and are uncontroverted. They are " admitted to exist without controversy" for purposes of the Motion. L.R. 56-3 (facts not " controverted by declaration or other written evidence" are assumed to exist without controversy); Fed.R.Civ.P. 56(e)(2) (stating that where a party fails to address another party's assertion of fact properly, the court may " consider the fact undisputed for purposes of the motion").
Plaintiffs are the fiduciaries of several multiemployer plans governed by the Employment Retirement Income Security Act (" ERISA"). (PUF ¶ ¶ 2, 6.) These plans include the Southwest Carpenters Health and Welfare Trust, the Southwest Carpenters Pension Trust, the Southwest Carpenters Vacation Trust, and the Southwest Carpenters Training Fund, among others. (Id. ¶ 6.) Defendant, a California corporation, is a contractor engaged in the construction industry in Southern California. (Id. ¶ 9.)
1. First Cause of Action: Damages for Failure to Pay Fringe Benefit Contributions
Plaintiffs provide evidence that on April 30, 2004, Defendant executed a Memorandum Agreement. (" Memorandum Agreement, " Tingley Decl. ¶ 14; Exh. 1.) The Memorandum Agreement bound Defendant to the terms and conditions of the Carpenters Master Labor Agreement (" Master Labor Agreement") dated July 1, 1992, and various trust agreements. (Id.) The Memorandum Agreement, Master Labor Agreement, and trust agreements (hereinafter collectively referred to as the " Agreements") required Defendant to pay fringe benefit contributions based on all covered work performed by Defendant's carpentry employees. (Id. ¶ 19.)
In violation of the Agreements, Defendant failed to pay all fringe benefit contributions it owed. (Id. ¶ 25.) Defendant, although it did submit required monthly reports, failed to make payments for the following periods: (1) July 2011; (2) April and May 2012; (3) July 2012 through March 2014; and (4) May 2014 through December 2014. (Id.) Additionally, Plaintiffs audited the books and records of Defendant for the period between April 1, 2010 and December 31, 2012. (Watanabe Decl. ¶ 8.) This audit indicated that Defendant had underreported the actual hours worked by its carpenter employees. (Id.) Based on Defendant's monthly reports and the results of the audit, Defendant owes $75,189.19 in missing fringe benefit contributions. (Tingley Decl. ¶ 28.)
2. Second Cause of Action: Specific Performance
Plaintiffs provide evidence that the Agreements require Defendant to complete and submit monthly reports stating the amount of contributions owed. (Id. ¶ 31.) Plaintiffs alleged in their Complaint that Defendant failed to submit the required reports in March and April 2014. (Compl. ¶ 29.) However, Plaintiffs now confusingly assert that Defendant did not file its monthly reports at any point between April 2014 and present. (Tingley Decl. ¶ 29.) This appears to be an error, as Plaintiffs provided evidence that Defendant submitted the required monthly reports from May to December of 2014. (Tingley Decl. ¶ 25; Exs. 8, 9.)
IV. DISCUSSION
A. First Cause of Action: Damages for Failure to Pay Fringe Benefit Contributions
1. Analysis
Defendant's failure to pay the required monthly contributions constitutes a breach of the Agreements. Furthermore, ERISA provides that, if a multiemployer plan or collective-bargaining agreement obligates an employer to make contributions, the employer must make the contributions according to the terms and conditions of the relevant agreements. 29 U.S.C. § 1145. Defendant's failure to timely and fully pay all contributions, calculated according to the rates specified in the Agreements, violates § 1145. This violation thus renders Defendant liable for damages and remedies enumerated in the agreements and provided under ERISA.
2. Damages
Plaintiffs request several types of damages from Defendant, including the unpaid contributions, liquidated damages, interest on the unpaid contributions, audit fees, prejudgment interest, and attorneys' fees. The Court considers each in turn.
a. Unpaid Contributions
Plaintiffs have submitted evidence demonstrating Defendant's failure to make, in full, the payments required under the Agreements, and the Court finds that Plaintiffs are entitled to $75,189.19 in unpaid contributions for the following periods: (1) July 2011; (2) April and May 2012; (3) July 2012 through March 2014; and (4) May 2014 through December 2014. (Tingley Decl. ¶ 25; Exs. 8, 9.) The unpaid contribution total also includes unpaid contributions that resulted from underreported hours between April 1, 2010 and December 31, 2012.
Defendant did make contributions during this period. However, Plaintiffs audited Defendant's record for this period (as the Agreements allowed) and determined that Defendant underreported the actual hours worked by Defendant's carpentry employees. (See Watanabe Decl. ¶ 8.)
In total, the Court AWARDS Plaintiffs $75,189.19, the sum of unpaid contributions during the period of Defendant's delinquency. See 29 U.S.C. § 1132(g)(2) (mandating payment of unpaid contributions for violations of ERISA).
b. Liquidated damages
ERISA also provides that a prevailing trust fiduciary is entitled the greater of an amount equal to the interest on the unpaid contributions or the liquidated damages provided under the applicable agreements. 29 U.S.C. § 1132(g)(2)(C). The statute caps the liquidated damages at twenty percent of the unpaid contributions. Id. § 1132(g)(2)(C)(ii). Here, the Agreements provide that an employer must pay liquidated damages in the amount of ten percent of the unpaid or late contributions. (Tingley Decl. ¶ 26.) The liquidated damages provision is within the amount allowable under ERISA. Accordingly, the Court finds that Defendant owes Plaintiffs $24,359.43 in liquidated damages, which equals ten percent of the late or unpaid contribution. (see id. ¶ 28; Ex. 9 (breakdown of the liquidated damages calculation).)
In sum, the Court AWARDS Plaintiffs $24,359.43 in liquidated damages provided under the Agreements.
c. Prejudgment Interest
ERISA specifically dictates that a court award prejudgment interest in unpaid-contribution actions like this one. 29 U.S.C. § 1132(g)(2)(B). The interest rate is either the rate set under the relevant agreements, if any, or the rate established under 26 U.S.C. § 6621. 29 U.S.C. § 1132(g)(2). Here, the Agreements provide an interest rate of seven percent per annum. (Tingley Decl. ¶ 27.) Accordingly, the prejudgment interest owed under the Settlement Agreement is $15,728.69, which is seven percent interest on the unpaid contributions, accrued per annum until August 17, 2015. (See Tingley Decl., Exs. 10, 11 (providing a breakdown of the interest calculations).)
The Court thus AWARDS Plaintiffs $15,728.69 in prejudgment interest under the Agreements.
d. Audit Fees
Plaintiffs additionally request an award of $1,317.50 for audit fees. ERISA does not specifically authorize an audit fees award. However, Section 1132 permits a court to award " such other legal or equitable relief as the court deems appropriate." 29 U.S.C. § 1132(g)(2)(E). The Agreements provide that Defendant will pay the audit costs if an audit of Defendant's records revealed payment delinquencies, as happened here. (Watanabe Decl. ¶ 10.) Pursuant to the Agreements, the audit costs are calculated at $75.00 per hour, (see id.), a rate the Court finds reasonable.
The Court thus finds it appropriate to AWARD Plaintiffs $1,317.50 in audit fees.
e. Attorneys' Fees
Section 502 of ERISA requires an award of attorneys' fees incurred in enforcing the agreement or when a benefit trust fund prevails in an action to collect contributions. 29 U.S.C. § 1132(g)(2)(D). Local Rule 55-3 further provides that where a statute allows for the recovery of reasonable attorney's fees, those fees shall be calculated according to the schedule provided under the Rule. L.R. 55-3. This schedule establishes that where the judgment is over $100,000 a reasonable attorney's fee is equal to $5,600.00 plus 2% of the amount over $100,000.00. Id. Calculated pursuant to Local Rule 55-3, Plaintiffs' reasonable attorney's fees in this case are $5,723.87. (See Vartanian Decl. ¶ 8.)
Accordingly, the Court AWARDS attorneys' fees of $5,723.87.
B. Second Cause of Action: Specific Performance
Specific performance is not itself a cause of action, but rather " a remedy for breach of contract." Golden West Baseball Co. v. City of Anaheim, 25 Cal.App.4th 11, 49, 31, 31 Cal.Rptr.2d 378 (Cal.Ct.App.1994) (emphasis in original); see also Harara v. ConocoPhillips Co., 377 F.Supp.2d 779, 796 (N.D. Cal. 2005) (" Specific performance is a form of contractual relief, not an independent claim"). Nevertheless, Plaintiffs have sufficiently stated a claim for breach of the Agreements as to entitle Plaintiffs to specific performance. See Blackburn v. Charnley, 117 Cal.App.4th 758, 766, 11 Cal.Rptr.3d 885 (Cal.Ct.App. 2004) (To establish a right to specific performance under a contract, a plaintiff must establish: " (1) [the contract's] terms are sufficiently definite; (2) consideration is adequate; (3) there is substantial similarity of the requested performance to the contractual terms; (4) there is mutuality of remedies; and (5) plaintiff's legal remedy is inadequate.") Plaintiffs have provided evidence that the terms of the contract were sufficiently definite and consideration was adequate, that the requested performance mirrors the contractual terms, and that Plaintiffs' legal remedy is inadequate. (Tingley Decl. ¶ ¶ 19, 31.)
However, as the Court previously explained, Plaintiffs confusingly assert that Defendant failed to submit its reports between April 2014 and the present, but this assertion does not quare with Plaintiffs' claims for missing fringe benefit contributions (see Motion at 2.) As such, the Court GRANTS Plaintiffs' Motion on this claim, but will only order Defendant to submit reports from January 2015 until the present date.
V. CONCLUSION
For the foregoing reasons, the Court GRANTS Plaintiffs' Motion. The August 17, 2015 hearing is VACATED. The Court AWARDS Plaintiffs:
(1) $75,189.19 in unpaid contributions;
(2) $24,359.43 in liquidated damages;
(3) $15,728.69 in prejudgment interest;
(4) $1,317.50 in audit fees; and
(5) $5,723.87 in attorneys' fees
The Court also ORDERS Defendants to submit the required monthly reports from January 2015 until the present date. The Court will enter judgment in accordance with this order.
IT IS SO ORDERED.
JUDGMENT
This Court has granted the Motion for Summary Judgment by Plaintiffs CARPENTERS SOUTHWEST ADMINISTRATIVE CORPORATION, and BOARD OF TRUSTEES FOR THE CARPENTERS SOUTHWEST TRUSTS (collectively " PLAINTIFFS") against Defendant GAMMA CONSTRUCTION SERVICES, INC.
IT IS ORDERED AND ADJUDGED that PLAINTIFFS shall recover from DEFENDANT:
Contributions:
$75,189.19
Liquidated Damages:
$24,359.43
Prejudgment Interest:
$15,728.69
Audit Costs
$1,317.50
Attorney's Fees:
$5,723.87
Total Judgment:
$122,318.68
Additionally, DEFENDANT is ORDERED to submit its monthly reports, as required by the Agreements, for the period between January 2015 and the present.